Investing in America's Mojo

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All around us we are beginning to see signs of an economic Spring from the private sector, but not yet in jobs which are always the lagging indicator of recovery. Among the evidence is the announcement by Intel President and CEO Paul Otellini of a new corporate initiative called the “Invest in America Alliance” made up of companies which plan to invest a total of $3.5 billion in US based technology companies over the next two years, hire more than 10,000 new American college graduates and focus their collective efforts on improving America’s strategic competitiveness. While this is not spending on the par our Government has been stimulating pet projects and lost causes with over the past year, it is far more profound and lasting. In discussing the alliance strategy this week in a presentation at Brookings Institution, Otellini said:

“Strong, enduring economies grow out of a culture of investment and a commitment to innovation. We simply must have a clear, consistent strategy to promote innovation, investment, and start-up companies. There are things business can do, and ought to do, independent of what government achieves.”[1]

Now this is a jobs program we can believe in! Its message is clear and simple: To create jobs and build our economic recovery America must focus on growing and sustaining our strategic competitiveness. There have been a lot of oil spots on America’s driveway lately. You know the kind, those drips you find which signal something is wrong, but the problem isn’t big enough to force us to go to our mechanic to fix the problem. Over time those leaks have lead to the virtual de-industrialization of America as it became cheaper and more profitable to outsource jobs and move manufacturing and production off-shore.

Let’s face it our children cannot all make a living as baristas at Starbucks or work for the Chinese. We need to restore our science, math and technical skills to rebuild America’s competitiveness for the future. But finding the skills we need to achieve this goal is not easy today in America.

A study done in 2009 by The Information Technology and Innovation Council for the European-American Business Council found that the US ranked sixth among nations in technology development and still lead the EU but was falling steadily behind over the last decade.[2]

Outsourcing of jobs was not just a search for lower labor costs for factory work. It was a search for the technical skills and expertise we often no longer had at home. We still trained technical professionals but the best qualified were foreign students in the US. We have the capability to train high quality workers in the US—we are doing it, but among technical skills and specialties a growing share of them are foreign students taking our technology and skills back home.

I was part of a successful software start-up called Global Energy Decisions. Our business required highly skilled quantitative analysis, software development and simulation modeling to meet the product and service needs of our clients. My greatest contribution to the success of our company was assembling and retaining a team of skilled economists, engineers, scientists and consultants from around the world to build world class products and meet the needs of our clients around the world. But it was not easy and required a constant hassle over H1-B visas to be able to hire and retain the talent we needed—just one of the roadblocks to American competitiveness.

Outsourcing across the value chain has made us more dependent on suppliers of specialized equipment and parts from around the world and required fortunes in energy costs and logistics to ship commodities and components everywhere to build “world cars” or cheaper flat screen TVs. With all this went our dollars and a balance of trade that turned the world’s economy on its head imposing risk and vulnerabilities this last recession highlighted in stark contrasts.

But this is not a rant about globalization. Quite the contrary, the benefits of global economic growth vastly exceed its downsides. Because of it the standards of living in Asia and many other parts of the world are vastly improved. Because of it technology and technical training has lifted millions out of poverty and created vast global markets for products and services. But in a more competitive world, America must invest more and do more to stay competitive. Today, our economic recovery depends upon it, but often our policies and laws are not aligned to support such growth. The message from corporate America is if you want jobs, help us compete.

What does not kill you makes you stronger

The message from Intel, Adobe, Cisco, Dell, Google, Microsoft, and Yahoo, and others joining this Invest in America alliance is that it is time to restore American’s competitive advantage by focusing on the fundaments of training and education the next generation of skilled workers, by rebuilding the American industrial and technology base to sustain ourselves and reduce both our economic and strategic risks, and to step up to do what America does best—lead by innovation, ingenuity, and insight to live into our economic Spring.